SATA Internaçional - Azores Airlines SA v Hi Fly Limited

SATA Internaçional - Azores Airlines SA v Hi Fly Limited

On its true construction, the novation agreement transferred Hi Fly’s right to be paid rent and maintenance reserve payments accruing from 1 September 2019, and default interest on them, to AELF. However, Hi Fly and AELF are entitled to rectification of the novation agreement to reflect a shared common intention that all such sums relating to the period prior to the Effective Time are to remain due to Hi Fly.

Parties
Claimant: SATA INTERNACIONAL – AZORES AIRLINE SA; Defendant: HI FLY LIMITED; Additional Party: AIRCRAFT ENGINE LEASE FINANCE LIMITED
Jurisdiction
England and Wales
Judgment Date
31 October 2024
Procedural Posture
Commercial / Judgment
Outcome
Rectification granted; money judgment in favour of Hi Fly.
Legal Topics
Novation, Rectification, Interpretation of Contracts, Aircraft Lease, Mistake in Contract
Contract Law Commercial Law Novation Rectification Interpretation of Contracts Aircraft Lease Mistake in Contract

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Parties

SATA INTERNACIONAL – AZORES AIRLINE SA

Claimant

HI FLY LIMITED

Defendant

AIRCRAFT ENGINE LEASE FINANCE LIMITED

Additional Party

Procedural Posture

Commercial / Judgment

Legal Issues

  1. 1 Whether the novation agreement transferred the right to recover rent accruing after 1 September 2019 to AELF
  2. 2 Whether the novation agreement should be rectified to preserve Hi Fly’s entitlement to those sums

Ratio Decidendi

On its true construction, the novation agreement transferred Hi Fly’s right to be paid rent and maintenance reserve payments accruing from 1 September 2019, and default interest on them, to AELF. However, Hi Fly and AELF are entitled to rectification of the novation agreement to reflect a shared common intention that all such sums relating to the period prior to the Effective Time are to remain due to Hi Fly.

Court Disposition

Rectification granted; money judgment in favour of Hi Fly.

Orders

  • Novation agreement to be rectified by substituting 'Effective Time' for 'Economic Closing Date' in clause 7.3.
  • Hi Fly entitled to a money judgment for sums due.